Daily Strategy for Investors on August 8, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on August 8, 2019, pointing out some of the must-know events in the equity market as follows:

1) The BOT announced to cut the policy interest rate by 0.25% to 1.50% as expected.

2) The SET has been weighted down by major commercial banks  as (1) policy interest rate cut will pressure in NIM (2) weak economic condition in 2H19 may cause NPL to rise from very good control in 1H19 (3) Being severely disrupted by new financial innovations results in a continuously decline of fee which has previously been the main income of the bank.

3) The crude oil price fell sharply by -5% and became a factor to weight energy stocks down.

4) Expected a lower interest rate will not enable the baht to depreciate much. Therefore, the export sector may not be benefitted from the policy interest rate cut by BOT this time.

5) Expect Thai stock market index today to be at 1,660-1,683 points. Recommended stocks are KKP (TP ฿80.00), THANI (TP ฿8.30) and TASCO (TP ฿19.70).

 

Pick of the day: Recommend “BUY” KKP at a target price of ฿80.00/share.

The 2H19 net profit is expected to improve. Normal profit for each quarter is expected to be Bt1.50bn but in 3Q19 is expected to be driven by revenue from commission fee and investment banking business that may well significantly increase. It is expected that, in 3Q19, there will be revenue from DOHOME IPO deal, Asset World Corp (AWC) IPO deal and merger deal between TMB Bank (TMB) and Thanachart Bank (TBANK) as well as a GPSC and GLOW deals.

Meanwhile, interest income is expected to be stable close to the previous quarter of around Bt3.0bn with around 5% loan growth. AWS recommends BUY with a target price of Bt80.00 based on a 1.50x Prospective PBV. Moreover, KKP stock is rather interesting with a high dividend yield of around 7.6%.

KKP remains very strong in a full uptrend from the occurrence of Daily, Weekly, and Monthly Buy Signal. Giving KKP, the next target is at Bt81.00 and the significant target is at Bt100.00, respectively. The short-term stop loss point is at Bt71.00. (Resistance: 74.00, 74.75, 76.25; Support: 72.75, 72.00, 70.50)